How to Avoid Blowing Your Car Budget | brokeGIRLrich
Buying a car can be a real time of excitement, particularly for younger people as it can offer up that first real sense of freedom and independence. With all the anticipation involved it can be easy for the heart to rule the head, and countless people have ended up with a dud because they ‘fell in love at first sight’ with their car.
For most people, their car is likely to be one of the most expensive investments they ever make outside of owning their home. It deserves the same care and attention you’d give to any other major purchase, and if you do your research carefully you’ll find you get much more for your money.
Research, Research, Research!
Knowing what you’re shopping for can make it much easier to get the car that you need. If you’re travelling long distances regularly, such as big commute to work, then look for cars that are reliable and offer a good MPG. If you’re buying a car for the school run and family trips, things like the safety rating become increasingly important.
Check reviews on the major car sites and try to narrow it down to a few models that would meet your needs. Find out what the book value should be for those models and compare prices online, both private sales and dealerships. Dealerships often cost a little more, but you tend to have more recourse if there are any problems with the car than a private sale.
How Much Can You Afford?
For me, cars = freedom and adventure. And somewhere to put some paint. ;o)
Setting a budget for your car is just common sense, but there’s more to consider than just the sticker price. You’ll need to consider the cost of insurance, servicing, parts and fuel economy, as those are where the real savings can be made. That second hand Mercedes might be the same price as a Ford, but you’ll be paying way more for tyres, parts and servicing than a smaller car.
There’s usually some room for negotiation when it comes to the sticker price, and most dealerships will slightly overprice their cars to make it feel like they’re giving you a deal when they take some money off! Some people find it tough to confront these things, but there’s usually savings to be made if you hold firm.
Trust Your Gut
As with most things in life, if it seems too good to be true then it probably is. If you’re doing your research and you find the model you want priced much lower than the rest, chances are something is up. If you’re feeling pressured by the salesman at the dealership, walk away and take some time to think things over.
Trust your instincts and don’t rush into anything and the chances are you’ll be fine. Treat buying a car like the serious investment it is and you’ll find your money goes much further in the long run. This car buying info graphic from Cyldesdale Bank offers a pretty useful checklist to work through when you’re planning a purchase, and you can always refer back to this post if you’re struggling with the decision!
A good car can almost be taken for granted, and you really don’t appreciate it unless you’ve bought a real clunker in the past! Do your research, set your budget and trust your instincts and you’ll be on the right path to get the perfect car for you.
I’ve had both! I literally cried when my last car died; it was paid off and the best ever. And prior to that, it was all clunkers. This one’s middle ground, but it fit in the budget so I’m all right with it for now.
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My first was definitely a clunker. It nickeled and dimed me to death – and I was stupid and didn’t know when I was being taken advantage of at the shop. It was a pretty costly education.
Knowing if/when to walk away is so important. If I want to buy something but red flags start coming up, my gut reaction is to work through it and find a way to buy it anyway. Bad idea! Much better to walk away, think it over and make a decision that you won’t regret!
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Yeah, always trust your gut! In most things in life, I think.
The car I currently drive is the first new car I have ever owned. My favorite car was my 1992 Mazda Miata — I paid cash for it, and my insurance was under $80 per month! It was fantastic. The reason we went with the new car this time around was that the interest rate is only 0.9%, and it made financial sense.
The “trust your gut” section is spot on. I found a fantastic price on the exact model and color car I wanted, and almost ran down to the dealership the same day I saw it online. As it turns out, the car had been in a flood!
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My first car was a ’93 Mazda MX-3 and it was a death trap. I learned so much about car repairs from owning that thing.
I really want to own a car someday, but since I don’t have enough money, I’m still saving for it. I would choose a car that fits well on my budget.
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Good for you! It’s so easy to turn to financing rather than properly budget for a car! I love mine and it’s 7 years old. Toyotas have pretty good life spans usually, so I’m hoping to get another 7 out of it, but I’m starting to save for the next one now.
Our next car purchase is hopefully many years away, but my most recent research seemed to be that a 2-3 year old basic car (4 door sedan) would probably be the cheapest to own over the long haul (including purchase price and maintenance). Our current car is a touch over 11 years old, but we bought it in its 8th year. I wouldn’t call it a clunker, but the dents on the side might beg to differ.
Haha, as long as the dents aren’t actually voicing their opinions yet, you’re probably safe. 😉
Couldn’t agree with your more, Hannah. This has been my experience with purchasing second hand cars in the past too. 2 – 3 years means the value has depreciated but if the car has been cared for it’s quality has not deteriorated to a poor level which leaves you in a good position to have greater control over its remaining lifespan!
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One of the biggest things is to not tell them your budget/desired monthly payment ahead of time. Otherwise, they skew the numbers to fit. And remember what the ultimate price will be if you make the minimum payments.
Our big thing was that we wanted something that would be a minimal car payment. In the end, we went with a used model that we could pay for outright. Which may be the best way to avoid getting carried away.
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Yeah, I’ve never actually made car payments, I’ve always just bought things outright, so the prospect of ever taking them on is not appealing to me. I think if my car fund isn’t high enough for a new car when this one goes, a used one will do me just fine.
Researching is huge! I’m a huge proponent of doing your research first. Then, I think you need to pay cash as much as is possible (and plan ahead for these purchases).
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Planning ahead definitely makes the whole car buying process a world of easier – although sometimes it seems like as soon as you have the best intentions to get started, something awful happens to your car and throws a wrench in your whole plan.
I drive my cars forever as long as they remain reliable. I have to agree that doing your research is important. There are some cars that just have higher maintenance to them and more problems. I don’t buy new so by the time I buy a car a year or more has passed and I can see the model’s reliability rating. An easy way to look at any car model for a high level look is by checking MSN Auto. I also pull a car fax before purchasing and even when I bought a 1 year old GM Certified car I paid my mechanic $75 to do a full check to make sure it was everything they said it was and identify anything that needed to be repaired or serviced. Save and pay cash for your car and then keep up with all required maintenance is the best way to go,
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I really appreciate the insight you give on the budget you set for buying a new car. You talk about how setting the budget for your car not only includes the sticker price, but it includes insurance, servicing, parts, and fuel. Thus, being realistic in the type of car you want and the money you have to pay for it, will help you to look at the best options that stay within your budget! Thank you for your insight!
Definitely! When I saved up to buy my first car, when the time came, I took out the amount of the first year’s insurance and only used the amount I had left. There are so many other little expenses that you need to remember!
I love this idea of researching typical auto repair costs per each car model. No two car models are created the same. For this reason, repairs may cost different amounts. It is better to be ahead of the game and know exactly what it will cost to repair this or that item over the life of the car.
Definitely. Part of the reason I love my Matrix is that along with all the other excellent reviews, all maintenance reports were minimal. Knock on wood – I’ve had her 8 years and hasn’t gone in for anything worse than a flat tire.
Thanks for your tips about finding the right used car. I agree with you about making sure that you do as much research as you can. Knowing these facts can help you negotiate prices and know what repairs might be needed at specific mileages. Knowledge is power, and you can always use that to your advantage to help you feel confident about your decision.
I definitely agree that when it comes to staying within your car budget it is essential that you do your research. By doing that you can find the best and cheapest car for you. This can also help you learn how expensive regular repairs are, as well as different needed parts. It is essential for you to find a car that you know you can afford to take care of.
I agree that it is smart to set a budget for how much you are willing to spend on a car before you go looking to buy. If one does not mentally prepare in this manner than the first thing that will happen is a luxury car will catch their eye and they will be hooked before they know it. I have bought several cars in my lifetime and this is something I’m glad I learned early on because I was able to take the money I saved and use it for repairs.
I like the idea of setting a budget for your car. I haven’t thought about that in the past, but it would be really useful. I have a budget for everything else, why not my car? The hardest part is paying for auto repairs. Although, I can be better at finding the best price for those as well.
I always forget to incorporate insurance into my car budget. And oil changes. :oP
Thanks for talking about negotiating! I’m not the kind of person who thinks to (or really enjoys to) do it, but if some places really do mark up their prices just for negotiations’ sakes, I’m definitely going to do it. I do like that there is a safety net of sorts with a dealership if something is wrong with the car, and so I’ve decided that I want to go through one. But I’ll have to work on my negotiating skills!
The more research you can do the better for sure. There’s nothing worse than making a bad decision and then realizing that you could have avoided it had you done a bit of research. Thanks for the advice!
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I really appreciate you mentioning that a car budget needs to include the cost of maintenance and fuel. My husband really wanted to buy a car last month and we had to have some really long talks about it. When it came down to the final numbers, it was the cost of these other things that come along with car ownership that made him realize we need to save up a bit more first.
Fuel is a big one. So many otherwise awesome cars are gas guzzlers and if fuel goes back up to $4 or more dollars a gallon, it becomes a budget destroyer.
Hi there Mel, nice guide and tips there. Most of us have fallen into one trap or another when buying a car. I really regret when I first bought my first car because I really didn’t take the time to read reviews or do some research. I ended up buying a guzzler which kept frustrating me and had to sell it after some 4 months. Nowadays before spending on something serious like buying a car, I do my research and even ask friends to give their two cents 🙂 Thanks a lot for sharing these tips with us.
Cindy
I like the tip to set a budget for not only the initial cost of the car, but the future costs as well. While insurance, servicing, and parts can be expensive, there are ways to mitigate the costs, especially if you buy a used car. I like to buy my own used parts before I go in to get the car serviced, so that I only have to pay for labor. It actually ends up saving a lot of money in the long run.
I agree that research is huge. Fortunately I didn’t face an immediate emergency and was able to look for quite some time before making a purchase. I was able to visit many dealerships and finally found a great car within my budget. Great article.
Yes, me too.
Congratulation! I think anything that we also need to research, but for the big budget as the car, it is very necessary.
Thanks Mel @ brokeGIRLrich!
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Yes, I am one of people who have the most expensive investment for my car so I am very happy when reading your post – how to avoid blowing your car budget. It is very useful to me. Thank you very much!
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Maintenance on your car is a lot cheaper than repair. Have it regularly. Goes a long way.
I like your tip to set a budget for your car. That’s what I’ve been doing for the past year, and I’ve saved a lot of money. For repairs, I like to get used auto parts. I haven’t had any trouble with them yet, and I they’re cheap!
Many car owners manual today recommend increasing the interval between oil changes. But frequent oil change is still necessary especially if you are maintaining a used car. Frequent oil changes flush abrasive dirt and metal particles out of the engine, thus prolonging its life. Change the oil filters because the old filters contain build up of oil and dirt particles that will otherwise remain and mix with the new, clean oil.
These are all really good suggestions! Purchasing a used car is also a great idea if you’re looking to save money on a vehicle. It’s important to make sure you take time finding exactly the right one for you, but that process can be fun and worth the deal! Thanks so much for sharing your ideas!
the dealership but you should never buy a car on your first trip unless you are made of money. You will always get a better deal down the road. Thanks for the tips.
Purchasing a used car really has the potential to save you a lot of money. Obviously you can find some older cars that are more expensive than new ones, and vice versa, but I feel like you have a better understanding of the value you’re getting once you’ve done some research. Thanks for sharing your thoughts!
Love the advice in this post, and I agree that it is SO important to trust your gut! I think people often get so tied up n pricing and comparing that they forget to follow what their gut is saying. Thank you for sharing!
Great post! Doing research and not settling for the lowest price will really save you when it comes to buying a car – with used vehicles especially, you never know what could be wrong! If you have to get a lot of repairs done right after buying a car, you’ll probably end up spending more than a brand new car.
Thank you for this excellent article.
Also, there are other ways you can save costs when you are working with your car budget. One of them is through auto repairs.
While there are thousands of things you can do to save costs, one of the simplest way of saving money on your auto repair is to have a good maintenance culture.
Taking proper care of your car when it’s still in good working condition will ensure that it lasts longer. And it’s understood that changing things like the transmission fluid at the appropriate time.
Instead of going to your local auto shop to change your oil, you can get yourself a high-quality synthetic oil and STP oil filter and change it yourself.
Not only will this cut your expenses, but it will also reduce the time wasted parading your local mechanic shop.
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You make an excellent point about how you need to research. My brother is hoping to find the right truck parts for his vehicle. He’s hoping to find a place that sells quality parts that’s close to his job.
Thanks for the article. I always seem to blow my budget no matter what happens. Insurance goes up, petrol goes up. might just buy a motorcycle!
Thanks For Sharing Such beautiful information with us
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